References in Text
The Emergency Economic Stabilization Act of 2008, referred to in subsec. (e)(1), (2)(C)(ii)(I), is Pub. L. 110–343, div. A, Oct. 3, 2008, 122 Stat. 3765. Section 101(a) of the Act enacted section 5211(a) of Title 12, Banks and Banking, and amended section 5315 of Title 5, Government Organization and Employees, and section 301 of Title 31, Money and Finance. Section 120 of the Act is classified to section 5230 of Title 12. For complete classification of this Act to the Code, see Short Title note set out under section 5201 of Title 12 and Tables.
2008—Subsecs. (e), (f). Pub. L. 110–343 added subsec. (e) and redesignated former subsec. (e) as (f).
1996—Subsec. (b)(6)(D). Pub. L. 104–188 added subpar. (D).
1988—Subsec. (b)(5)(A). Pub. L. 100–647, § 1018(d)(6), substituted “section 1361(b) but without regard to paragraph (1)(C) thereof)” for “section 1361(b))” in cl. (i) and inserted at end “Stock described in section 1504(a)(4) shall not be taken into account under clause (ii)(I) if the payment does not adversely affect the shareholder’s redemption and liquidation rights.”
Subsec. (b)(5)(B). Pub. L. 100–647, § 1018(d)(7), inserted at end “The regulations prescribed under subsection (e) shall include regulations providing for the application of this subparagraph in the case of shareholders which are not individuals (including the treatment of nonvoting interests in an entity which is a shareholder) and where an entity holds a de minimis amount of stock in the corporation.”
Subsec. (d)(5). Pub. L. 100–647, § 1018(d)(8), substituted “officer of any member” for “officer or any member”.
1986—Subsec. (b)(2)(A). Pub. L. 99–514, § 1804(j)(6), inserted “For purposes of clause (ii), payments not treated as parachute payments under paragraph (4)(A), (5), or (6) shall not be taken into account.”
Subsec. (b)(2)(B). Pub. L. 99–514, § 1804(j)(7), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “The term ‘parachute payment’ shall also include any payment in the nature of compensation to (or for the benefit of) a disqualified individual if such payment is pursuant to an agreement which violates any securities laws or regulations.”
Subsec. (b)(4). Pub. L. 99–514, § 1804(j)(2), substituted “Treatment of amounts which taxpayer establishes as reasonable compensation” for “Excess parachute payments reduced to extent taxpayer establishes reasonable compensation” in heading and amended text generally. Prior to amendment, text read as follows: “In the case of any parachute payment described in paragraph (2)(A), the amount of any excess parachute payment shall be reduced by the portion of such payment which the taxpayer establishes by clear and convincing evidence is reasonable compensation for personal services actually rendered. For purposes of the preceding sentence, reasonable compensation shall be first offset against the base amount.”
Subsec. (b)(5). Pub. L. 99–514, § 1804(j)(1), added par. (5).
Subsec. (b)(6). Pub. L. 99–514, § 1804(j)(3), added par. (6).
Subsec. (c). Pub. L. 99–514, § 1804(j)(5), inserted provision defining “highly-compensated individual”.
Subsec. (d)(2). Pub. L. 99–514, § 1804(j)(8), substituted “performed personal services for the corporation” for “was an employee of the corporation”.
Subsec. (d)(5). Pub. L. 99–514, § 1804(j)(4), added par. (5).
Effective Date of 2008 Amendment
Pub. L. 110–343, div. A, title III, § 302(c)(2), Oct. 3, 2008, 122 Stat. 3806, provided that:
“The amendments made by subsection (b) [amending this section] shall apply to payments
with respect to severances occurring during the period during which the authorities under section 101(a) of this Act [enacting section 5211(a) of Title 12
and Banking, and amending section 5315 of Title 5
, Government Organization
and section 301 of Title 31
, Money and Finance] are in effect (determined under section 120 of this Act [12 U.S.C. 5230
Pub. L. 98–369, div. A, title I, § 67(e), July 18, 1984, 98 Stat. 587, provided that:
The amendments made by this section [enacting this section and section 4999 of this title
and amending sections 275
of this title] shall apply to payments
under agreements entered into or renewed after June 14, 1984
, in taxable years
ending after such date.
“(2)Special rule for amendments.—
entered into before June 15, 1984
, which is amended after June 14, 1984
, in any significant relevant aspect shall be treated as a contract
entered into after June 14, 1984
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.